The Arab Digital Divide and the March towards a True Arab Knowledge Economy

The Arab Digital Divide

  • Most Arab nations have made significant progress towards becoming knowledge-based economies by making major improvements in ICT diffusion since the mid-1990s
  • However, the difference in ICT use across the region is so wide that it almost creates a digital divide with the Gulf Cooperation Council (GCC) countries on one side and the rest of the MENA countries standing on the other side of the divide.
  • Therefore, despite making significant progress towards becoming a knowledge-based economy, a lot needs to be done for expanding broadband capacity and spreading ICT usage in non-GCC Arab nations to create a true Arab Knowledge Economy.

In today’s fast progressing information era, numerous countries are focusing on knowledge creation and advanced technological development—together termed as ‘Knowledge Economy’.  In order to remain competitive in the global economy of the 21st century, most Arab nations are also utilizing the power of high-quality knowledge. They are laying out relevant policies and taking important steps to meet all requirements that define a knowledge economy and these efforts have yielded positive results as well. Since 2001, the Arab World has recorded the largest growth in Internet users across the regions in the world. There has been more than a 600% increase in the number of citizens accessing the Internet in the region. Some Arab countries have also launched initiatives for improving their education system and Information and Communications Technology (ICT) infrastructure.

A dynamic ICT infrastructure is a pre-requisite for a nation to fully participate in the global knowledge economy and to accelerate economic growth – it is measured by the extent of mobile telephony, computers, Internet access, and new electronic applications, all supported by a dynamic IT industry that boosts employment and economic growth. There is enough evidence that information and communication technology (ICT) plays an increasingly significant role in economic growth. According to a World Bank’s report, every 10 percentage-point increase in broadband penetration in low- and middle- income countries accelerates their economic growth by 1.38 percentage points.

Majority of the Arab countries have made significant progress towards becoming knowledge-based economies by making major improvements in ICT diffusion since the mid-1990s — the mobile cellular segment has grown from almost nothing in 2000 to 87 subscriptions per 100 people in 2010; during the same period, the number of Internet users in the MENA region increased tenfold to more than 100 million, with wide variation across nations, ranging from 12 users per 100 people in Algeria to 81 per 100 in Qatar. ­ According to a report by Madar Research and Development and Orient Planet, the number of Arab internet users is expected to increase to nearly 197 million users by 2017, with the internet penetration rate jumping from about 32% in 2012 to over 51% in 2017 — this would be nearly 3% above the world average at that time.

However, the difference in ICT use across the region is so wide that it almost creates a digital divide with the Gulf Cooperation Council (GCC) countries on one side and the rest of the MENA countries standing on the other side of the divide. The figure below shows the disparity between GCC and non-GCC countries. Libya is the only exception among non-GCC nations, with mobile broadband penetration of nearly 43 per 100 people, a rate comparable with GCC nations. Growth in Libya is driven by strong government support, which compensates for the low fixed broadband penetration, and Libya having a GNI per capita of $16,400.

Fixed and Mobile Broadband Internet Subscription Rate in Select Arab Countries

The Arab Digital Divide-1

 Source: International Telecommunications Union, ICT Adoption and Prospects in the Arab Region 2012

Overall, despite the progress made, a lot needs to be done for expanding broadband capacity and spreading ICT usage in the region. Just looking at the basic technology statistics, one can easily make out the inadequacy of the region’s ICT infrastructure. For instance, the average bandwidth in the Arab region is low at around 1 Mb/1,000 people, compared with 40 Mbs/1,000 people in the U.K. and 30 Mbs/1,000 people in France.

High costs of ICT services, driven by monopolies in certain segments, act as inhibitors in the Arab world. In 2008, Egypt, Lebanon, Syria, and Tunisia still had monopolies over international long-distance communication; Lebanon continued to have a monopoly on mobile services. Also, if we glance through World Bank’s report, only four Arab countries (UAE, Bahrain, Oman and Saudi Arabia) rank in the top 50 on the Knowledge Economy Index, as there is a lack of a coherent strategy among the Arab nations to support growth based on knowledge and innovation. The region continues to face many challenges in pursuit of transforming into an information-based economy, which requires implementation of key cross-sector reforms in education, innovation, ICT infrastructure, etc.

Thus, there is much more that can be done for ensuring that ICTs are used as the tool for increasing productivity, growth and employment, and that digital growth in the Arab world is inclusive. As this is done, MENA governments should introduce and implement policies for improving the ICT skills of their workforce, which will make them more employable, more innovative and an effective contributor to the development of a strong and inclusive Arab Knowledge Economy.

The article was originally published at: Arab Business Review

To read more thought-leadership stuff by leaders from Arab Region, please visit Arab Business Review

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